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Commerce Secretary Draws Fresh Complaint Over Ethics Disclosures

(Bloomberg) -- U.S. Commerce Secretary Wilbur Ross faces a new ethics complaint over an asset he promised to sell within three months of his 2017 Senate confirmation, but didn’t divest until well over a year later.

The Campaign Legal Center, a Washington, D.C.-based nonprofit that favors greater regulation of money in politics, filed a complaint on Thursday asking the Commerce Department’s Inspector General to investigate whether Ross made false statements when he disclosed a sale of stock in BankUnited Inc. in May 2017.

The value of BankUnited shares in question was small -- only a few thousands dollars -- but it was another example of Ross, one of the wealthiest members of President Donald Trump’s cabinet, allegedly failing to comply with disclosure requirements because he mistakenly believed a sale had been executed.

In the disclosure, Ross said he’d sold his BankUnited shares, which he valued at between $1,000 and $15,000. But 16 months later, he filed a new disclosure with federal ethics officials saying the sale had occurred Oct. 1, 2018. The value of BankUnited shares rose 5.4 percent between May 31, 2017, when Ross first said he sold the stock, and Oct. 1, 2018, the sale date he reported in his subsequent disclosure.

100 Shares

Ross has had a “pattern of submitting sworn documents to the government that contain omissions and inaccuracies,” according to the complaint, which supplements an earlier filing by the group in August. The supplemental complaint also asks the inspector general to investigate whether Ross violated conflict of interest laws while holding shares in the Florida bank.

In a statement, Ross said, “My October 31st transaction report corrected an earlier filing,” noting the date he disclosed the sale. He reiterated that the second filing was required because of his “mistaken belief” that the sale had already occurred. He added, “There were 100 shares of BankUnited stock.”

The Commerce secretary, 81, listed assets worth at least $336 million ahead of his Senate confirmation hearing. Government officials disclose their assets within broad ranges, with the largest tier valued at $50 million and up.

Public officials are required to sell investments determined to pose a potential conflict of interest in the months after they join the government. The BankUnited shares were among assets that Ross had agreed to sell under the ethics agreement he signed in January 2017.

Multiple Corrections

Ross explained in his disclosure that the shares were held in book entry form by the bank’s transfer agent and that he previously reported selling the shares because of the “mistaken belief” that the agent had executed the sale in May 2017. The October 2018 transaction was first reported by the Center for Public Integrity.

Ross has had to file multiple reports correcting previous filings, and his repeated failure to sell his assets before deadlines set by his divestiture agreement earned him a rare, public rebuke from the Office of Government Ethics, which oversees compliance with conflict of interest laws. David Apol, the acting director of OGE at the time, wrote to Ross in July that his lapses may have “created the potential for a serious criminal violation” and undermined public trust in the Trump administration.

Apol did note, though, that a review of Ross’s calendars, briefing books and correspondence by the top ethics official at Commerce found no evidence that he violated conflict of interest laws.

2017 Disclosures

OGE has yet to certify Ross’s annual financial disclosure report covering the assets he held in 2017, which doesn’t list the BankUnited stock among his holdings. The delay is unusual compared with previous administrations. The agency also hasn’t signed off on Treasury Secretary Steven Mnuchin’s disclosure for that year.

An OGE spokeswoman said agency rules prevent her from providing information on individual filings.

Ross, a New York businessman, described his investments as “complex” in a July statement responding to Apol’s criticism, and said that he self-reported his errors while working with Commerce ethics officials to avoid conflicts. He also promised in the statement to go beyond the requirements of his ethics agreement and sell additional assets to restore public trust.

Outside Review Sought

Democratic lawmakers have called for outside reviews of Ross’s compliance with ethics laws. The Campaign Legal Center’s original 115-page complaint, which was filed in August, detailed potential conflicts of interest and called on the inspector general to investigate Ross.

An attorney for Ross said that the complaint didn’t provide a factual or legal basis for believing Ross violated conflict-of-interest or other laws or engaged in unethical conduct.

Since certifying in 2017 that he’d divested all assets he was required to under his initial ethics agreement with OGE, Ross filed documents disclosing several late sales, with the delays varying from a few months to more than a year.

In December 2017, he disclosed sales of between $10 million and $50 million worth of shares in the investment management company Invesco Ltd., eight months after he’d promised to. At the time he said that he mistakenly believed the holdings had already been sold. The shares increased in value by 15.5 percent in the interim.

The same month, Ross disclosed late sales of shares worth at least $250,000 in Oregon-based transportation manufacturing company Greenbrier Companies Inc., and at least $1,000 worth of stock in Sun Bancorp Inc. In each case, Ross said he’d been unaware that he still held the assets.